Walter Industries begins offering 2.8 million sharesBy Sue ChangLast update: 4:39 p.m. EDT June 9, 2008SAN FRANCISCO (MarketWatch) -- Walter Industries Inc. (WLT:Walter Industries IncWLT 93.56, -1.76, -1.8%) has started offering 2.8 million of its common stock, the producer and exporter of metallurgical coal said late Monday. The company expects to grant to the underwriters an option to purchase up to an additional 420,000 shares within 30 days. Walter Industries intends to use the net proceeds from the offering to mostly repay outstanding debt. Morgan Stanley, Banc of America Securities LLC and SunTrust Robinson Humphrey are acting as joint book-running managers for the deal. http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b3A6...
Can someone comment on this? I thought paying down debt would be good. Is it bad because stocks are worth less now?IG
Paying down debt = goodDiluting stocks = badIn this case the bad is greater than the good = drop in value.However, long term it is probably a good management move so for us buy and hold types = very good.JMHOGrampa
Thank you for your answer, Grampa. I do have another question about them offering at $90.75. Is this what they're selling for? That is below market at this point. I'm confused as to how this works. Someone please enlighten me.Thank you in advance for your response.IGWalter Industries prices offering at $90.75 apieceWednesday June 11, 8:43 am ETWalter Industries prices offering of 2.8M shares at $90.75 apiece; proceeds to pay down debtTAMPA, Fla. (AP) -- Coal producer Walter Industries Inc. said Wednesday it priced a previously registered offering of 2.8 million shares at $90.75 apiece.The company expects to receive about $243.8 million from the offering, and will use the proceeds to pay down some of its debt.Walter has granted its underwriters an option to buy up to an additional 420,000 shares.Morgan Stanley, Banc of America Securities LLC and SunTrust Robinson Humphrey are joint book-running managers for the offering, while Raymond James, Morgan Keegan & Company, Inc., Avondale Partners, Brean Murray, Carret & Co. and Davenport & Company LLC are co-managers.
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